Howard Schultz’s Third Way

The former Starbucks chairman is thinking about getting into politics. What would that mean for the Democratic Party?

June 6, 2018

Over his years at Starbucks, Howard Schultz established himself as the king of coffee. But will he also be the American president? Maybe, he told The New York Times on Monday. Schultz intends to depart his corporate suite by the end of June, and sources close to him have said that he’s considering a career in public service. Schultz himself has stoked those rumors since he announced his departure. “I want to be truthful with you without creating more speculative headlines,” he told the Times. “For some time now, I have been deeply concerned about our country—the growing division at home and our standing in the world.”

Pointed words for a coffee salesman; but Schultz has been an openly political corporate executive for a long time. Under Schultz, Starbucks put its weight behind marriage equality. Other initiatives—“green” coffee cups, a 5 percent wage hike, and tuition reimbursement for employees who attend college—painted liberal varnish onto the nation’s largest coffee chain. Well-sourced rumors named Schultz as Hillary Clinton’s candidate for secretary of Labor, and the NAACP awarded him its National Equal Justice Award in 2017. The right wing’s yearly tantrum over the chain’s secular holiday cups has only boosted Schultz’s progressive reputation, as did outrage from Trump supporters after Schultz announced that Starbucks would hire 10,000 refugees in protest of Trump’s immigration policies.

But for all his headline-grabbing innovations, Schultz cuts a familiar profile in Democratic politics by combining socially liberal policies with a conservative economic bent. The Democratic Party will be tempted by independently wealthy candidates like Schultz, since it faces a financial disadvantage in its battle against the Republican Party. What Schultz represents though, is a centrism that is not only out of step with the party’s base but also with the larger electorate as well.

In particular, Schultz is obsessed with the hoariest concern of serious Beltway types: the national debt. In a December 2013 blog post on the Starbucks web site, Schultz stated that the chain’s annual holiday cups would bear the slogan “Come Together” to warn Washington, D.C., area customers about the debt “crisis.” He wrote, “My hope is that this simple message will serve as a holiday reminder from Starbucks of the spirit that has always bridged differences and that we all have the power to come together and make a difference during every season of the year.”

It was a clever bit of marketing. The average customer—or voter—doesn’t really know much about the debt, other than to vaguely intuit that too much debt is bad. But this largely stems from the misperception that a country’s debt is like household debt—which it is not, since the U.S. government is capable of printing money. A large debt does not necessarily indicate an unhealthy economy; it might even be a sign of health. But as a cause, the national debt is beloved by fiscal hawks, to whom it is a useful justification for slashing social spending. And Democrats, cowed by years of anti-debt, tax-and-spend messaging, pay regular lip service to debt reduction.

Starbucks’ noble gestures also sit opposed to its corporate practices, mapping out the limits of corporate social responsibility. Starbucks will hire refugees, but it won’t necessarily pay them a living wage. Its vaunted 5 percent raise still puts the average barista’s pay far below the $15 minimum proposed by groups like Fight for 15. The tuition reimbursement scheme did not live up its marketing promises, as Vice News noted back in 2014. Employees could only apply their tuition benefits to an online program offered by Arizona State University, and Starbucks still didn’t cover the full cost of tuition. In fact, the biggest beneficiary of Starbucks’s largesse was Arizona State University.

There is a consistent chasm between Schultz’s rhetoric and practice. To fight racial injustice, Schultz had his company write “Race Together” on coffee cups in 2015. But that didn’t generate as many headlines as the high-profile racial bias incident at a Starbucks in Philadelphia this year, in which a Starbucks manager called the police on two black men for sitting quietly in the store. Schultz responded by closing every Starbucks in the country for a four-hour training session on racial bias. But Schultz himself acknowledged that the session was “inadequate,” and the chain plans to incorporate racial bias training into its on-boarding procedures.

As a general practice, Starbucks admits the bare minimum and commits fractions of its vast resources to addressing real problems. And tellingly, that is the way Schultz is already positioning himself. Barely 24 hours after the Times’s initial report on his departure, Schultz tipped his hand with a long-winded complaint about the Democratic Party’s recent lurch to the left. “I say to myself, ‘How are we going to pay for these things,’ in terms of things like single payer [and] people espousing the fact that the government is going to give everyone a job,” he complained to CNBC. “I don’t think that’s something realistic.”

Conventional wisdom insists that single-payer health care, job guarantees, and the like are utopian fantasies; but conventional wisdom also walked the United States directly into historic levels of wealth inequality. As Americans warm to the idea of expanded government, left-leaning economists and public health experts are creating blueprints for the very policies that Schultz deems impossible. No one is saying it won’t be difficult to implement such policies, but that’s different from dismissing them altogether from the realm of what’s realistically possible. The truth is out there, if Howard Schultz cares to look.

Schultz is hardly the first Democrat to try to mix social liberalism with fiscal conservatism. It’s the old Third Way playbook, brushed off and cleaned up for another run. Schultz is reminiscent of Michael Bloomberg; in theory, he could fund any campaign of his own, much as J.B. Pritzker has done in his quest to become the governor of Illinois. But Schultz’s hand-wringing over policies like single-payer health care and job guarantees confirms that Democratic centrists have not disappeared and that they seem intent on repeating the mistakes of the past. The United States has no shortage of Howard Schultzes. Schultzes proliferate. And they are the reasons we can’t pay for things.